protection from an asymmetric technological risk

Renault-Nissan-Agassi plan to sell the car in Israel without the battery, and lease the latter. Since electricity is very cheap per mile compared to gasoline, consumers will be faced with a comprehensible comparison of running costs.

But to me, the real beauty is that consumers will be protected from a very asymmetric technological risk. The basic design of car bodies was settled a hundred years ago, and progress is now slow and incremental (satnav, ABS braking, etc). In batteries it is likely to be fast and bumpy. Leasing transfers this big risk back to the manufacturer, who is much better placed to plan for, price and hedge it.


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